Digital Services Post Pandemic: The Utilities Perspective

The pandemic accelerated digital technology adoption. But it was not all equal, and the experience across Utilities is a case in point.

Building further on the article series inspired from that published in Australia’s Nobel Laureates Volume III, where we highlighted the amazing speed of technology adoption through the pandemic and then considered the sectors that we work with at IPG. The broad view was very positive on how technology, community and government interests aligned to accelerate technology adoption and create many benefits.

As we consider those sectors we work with at IPG, in Government, Local Government, Utilities, Health and Community Services and Growing Companies, this article unpacks the Utilities sector. The phenomenon put forward previously and well unpacked by Scott Galloway1, Professor, NYU Stern School of Business, is also very true of Local Government. The pandemic accelerated pre-existing trends, underway prior to the pandemic.

By Mark Nicholls

Utilities create the conditions for a sustainable and successful society. However, with many in regulated markets and with rapidly changing customer and stakeholder expectations, digital technology both adds to those expectations and creates opportunities to match them.

Consistent with all sectors, existing trends have accelerated for Utilities. Remote working for staff and increased access to digital services by customers are two areas impacting on utilities. As we emerge from the pandemic and the economy gains pace, increased demands for energy and water follow, in an environment where even more requirements are being asked to meet sustainability expectations.

The 2022 inflationary and supply chain impacts are also pressuring regulated providers in their price constrained world, and all providers to vary degrees, even if some can pass on costs to customers. This in turn is creating significant market volatility. Those providers setup with contemporary enterprise technology platforms, and the capabilities to enhance those platforms are best equipped to deal with these challenges. This is consistent with all other sectors.

Those utilities that are more advanced and able to deal with these challenges are doing this via some combination of: 1. More integrated information technology and operational technology, that supports the ability to view integrated whole-of-organisation performance. 2. Integrated asset management and maintenance that integrates asset performance, finance, supply chain, inventory, and procurement perspectives. 3. Use of IoT and sensors to provide the data to optimise operations and asset management. 4. Customer Service systems that support digitised service delivery, pro-active customer communication and self-service. 5. Field operations systems which empower and support remote workers and provide in-time two-way data feeds. 6. Data management and Business

Intelligence to leverage from the volumes of data that can be available. 7. Workflow and automation, that help end to end processing across the organisation and limit the manual steps necessary to progress work, plus use of AI and Machine

Learning to augment existing analysis and decision making.

Each of these have the potential for savings in costs, increase speed of execution, may lift customer satisfaction, and reduce risks. As capabilities develop, new business models, including circular economy models cannot just be talked about but also implemented and potentially monetised.

To achieve these outcomes, it requires assets and operations teams to work with finance teams, and digital technology teams and others to participate in the decisions that generate these whole-of-organisation outcomes and benefits.

Central to this, is establishing the digital platforms to support the organisation working effectively with itself, and building the capabilities to take advantage of what your digital platforms can then do.

Utilities are generally adopting the following minimal set of platforms such as: • Asset management, finance, and supply chain platform • Billing and customer service platform • User collaboration platform

If you have multiple unintegrated applications within any of the above groups, or major parts of these areas without adequate systems support, then this is the first priority to address.

Other needs that could form separate platforms, or could be integrated into the above platforms include: • Field operations and works management • HR, payroll, workforce planning, learning and development, safety • BI and analytics • GIS and Spatial data, integrated into one or more of the above platforms • Laboratory management and smart metering To achieve these, it will require building the culture and capability as well as the digital technology platforms to support Utility objectives.

We would welcome your views and input on all aspects of this article, so please get in touch to share your views.

For more on getting the building blocks of innovation delivery in place, see this article, by IPG CEO, Mark Nicholls

AI RESHAPING INDUSTRY

From systems embedded into smartphones to detect skin cancer, to autonomous cars with driver fatigue detection and pedestrian avoidance systems, artificial intelligence (AI) is rapidly transforming the world we know.

By Jon Whittle, Director, CSIRO’s Data61

AI uses data-driven algorithms to autonomously solve problems and perform tasks without human guidance, enabling productivity gains for almost every industry. In fact, the adoption of AI is estimated to be worth $15.7 trillion to the global economy by 2030, presenting significant opportunities for Australia, enabling us to perform tasks faster, safer and cheaper. However, as the technology leverages data to create algorithms, ultimately, it can only be as good as the data.

While the algorithms that underpin the technology have been around for decades, exponentially growing volumes of data, as well as cheap and readily available computing infrastructure, now mean it can operate at scale and speed like never before, creating a host of applications across multiple sectors.

Take healthcare - research has shown that artificial intelligence can reduce costs, improve wellbeing and make quality care accessible for all Australians. It has also become a key part of everyday food security and quality, energy resources, future industries, transport and infrastructure, playing a key role in transforming economies, unlocking new social and environmental value as well as accelerating scientific discovery.

In 2019, the Australian government released its Artificial Intelligence Technology Roadmap, which was developed in partnership with CSIRO’s Data61 to identify strategies to help develop a national AI capability to boost the productivity of Australian industry, create jobs and improve the quality of life for current and future generations. Looking at the use of this technology within key Australian industries, it’s clear that some have been more enthusiastic adopters than others.

In 2019, the introduction of a new global accounting standard IFRS16 required reporting of all leases, affecting $US3 trillion of assets. Legal and accounting firms worldwide were challenged by this new requirement to change their practices to lease abstraction, a time-consuming, error-prone task that manually extracts key information from a lease contract for reporting. Through a CSIRO KickStart project, natural language processing approaches, based on machine learning, were used to enable software to learn from large datasets of leases, find the patterns in the contextualised text data and code the data for use downstream. This resulted in the development of Accurait, a world-first automated solution for accurately extracting, storing and classifying information from commercial leases and exporting it to other management systems, including account books.

Kakadu Park Rangers Serena McCartney (left) and Annie Taylor (right) use Artificial Intelligence to manage environmental threats.

This technology has since been trialed and demonstrated on more than two million documents, driving productivity through higher rates of error detection, faster turnaround times and lower labour costs.

Adoption of artificial intelligence is not just limited to industry. We’re also seeing it have a significant impact on our environment and the natural world, specifically Australia’s National Parks. In Kakadu National Park, concerns were raised when para grass, an invasive weed, began choking precious wetlands. The impact of this was vast. It began displacing native plants and reducing the habitat of magpie geese, a dwindling population considered to be a key indicator of ‘healthy country’ by traditional owners. Park rangers were struggling to monitor and manage the weed and had limited resources. In a bid to protect the natural habitat, researchers at CSIRO designed an AI tool, which, paired with Indigenous Knowledge, improved management of the area, resulting in the magpie geese population increasing from 50 to 1,800 birds — a 3,500 per cent increase.

Such examples of artificial intelligence serve as a reminder of the good this technology can do — creating value that didn’t previously exist and profound benefits to the economy, society and environment.

While this technology does indeed have the potential to drastically reshape industries, social and economic structures, the focus should be on creating real value. If we lay the right foundations, AI has the potential to boost productivity, grow the economy, generate jobs and create entirely new industries.